Evaluating the impact of circular economy model on business performance of listed seafood enterprises

Criteria for business efficiency evaluation have been suggested by various research, such as:

“Reading and analyzing corporate financial report” by Assoc. Prof PhD Nguyen Trong Co, Assoc.

Prof Ph.D Nghiem Thi Tha, “Monograph of financial report and reading, examining and analyzing financial report” by Prof PhD Nguyen Van Cong,.... Because of different approaches and interest in business efficiency of different subjects, the standpoints of the research are differentiated. However, the conjunction of authors determines that business efficiency is an economic spectrum, reflecting the level of utilizing resources in order to achieve the highest benefits to the enterprise and to society. Therefore, for evaluation, business must include indicators showing the level of resource use, and the benefits that business and society derive from the use of those resources.

174 THE THIRD INTERNATIONAL CONFERENCE ON: “FINANCE AND ACCOUNTING FOR THE PROMOTION OF SUSTAINABLE...

Therefore, the business efficiency of an enterprise is evaluated through a system of indicators reflecting business performance in both economic and social aspects. Based on theory and the business traits of the fisheries industry, the author proposes a system of criteria to evaluate the business efficiency of listed seafood enterprises as follows:

Table 3.2: Criteria for business efficiency evaluation in listed seafood enterprise No. Evaluation in economic aspect No. Evaluation in social aspect

1 Effect indicator 5 Waste disposal investment indicator

2 Capital efficiency indicator 6 Environmental contribution indicator

3 Efficiency ratio 7 Employee Per Capita Income

4 Profit indicator 8 Social welfare contribution indicator

9 Recycling indicator

(Source: Author) Currently, in Vietnam, there have been several companies in various industries pioneering in applying the circular economy model in business operation and achieving high efficiency such as:

Heineken Vietnam, Vietnam Dairy Products Joint Stock Company, etc. In the field of Fisheries, due to the characteristics of the industry, and strength and weakness in fishing, aquaculture and seafood processing, this model must be flexibly applied to certain businesses. The circular economy model in seafood enterprises is built on the basis of implementing a closed line of farming and processing shrimp, sutchi catfish, basa fish, etc. From there, businesses can actively control in all stages from breeding - farming - harvesting - processing - production - marketing - sales. Concurrently, it can take advantage of waste products from the production process such as shrimp shells, fish skin, fish bones, stomachs, etc., to produce by-products such as collagen, gelatin, animal feed, etc. Simultaneously, wastewater, sludge, and dead fish from farming activities are salvaged to irrigate fruit trees. An admiring example of successfully building a circular economy model in the Fisheries field is Vinh Hoan Joint Stock Company.

Figure 3.2 Circular economy model in Vinh Hoan Joint Stock Company

(Source: Vinh Hoan Joint Stock Company)

Figure 3.3 Exercising circular economy method in processing shutchi catfish in Vinh Hoan Joint Stock Company

(Source: Vinh Hoan Joint Stock Company)

Figure 3.4 Exercising circular economy method in Vinh Hoan Joint Stock Company

(Source: Vinh Hoan Joint Stock Company)

176 THE THIRD INTERNATIONAL CONFERENCE ON: “FINANCE AND ACCOUNTING FOR THE PROMOTION OF SUSTAINABLE...

In the sutchi catfish manufacturing process, with application of science and technology, none of the fish part is dissipated, such as skin, fat, intestines, which were once considered unusable. In addition to the main product - fish fillet, the company has taken advantage of fat to produce fish oil, fish skin for snack, collagen, gelatin, bubbles and frozen fish intestines, etc.

Table 3.3: Comparison of Vinh Hoan’s products before and after applying circular economy model Before applying circular economy

model

After applying circular economy model

Revenue - Fish fillet - Fish processed foods

- Fish fillet - Fish processed foods

- By-products (Collagen, fish oil, Gelatin, livestock feed)

(Source: Author) Products such as collagen, fish oil are high-end products, which increase revenue from certain sales and service: apart from the main revenue from traditional products such as fish fillet and fish processed foods, applying a circular economy model allows another stream of income from by-products, production wastes. The sales from by-products have been increasing regularly: in 20219 the revenue was 967 billion Dong, by 2020 it was 1,253 billion Dong. This enhances business efficiency in terms of economic perspective. At the same time, utilizing input materials helps Vinh Hoan improve business efficiency in terms of social perspective by increasing its recycling indicator.

In the manufacturing process, Vinh Hoan Joint Stock Company has turned waste into resources: wastewater from the farming area can be used for crop irrigation; dead fish and sludge are processed into compost; redundant packages are used as materials for waste treatment or fertilizer manufacturing plans. This process not only helps the company improve business efficiency by generating revenue from agricultural products such as fruit trees, crops and fertilizers, but also guarantees the treatment of waste in the production process, reduces environmental pollution, and achieves the sustainability goal. In addition, overseeing from seed - farming - harvesting - processing - production - marketing - sales enhances company’s self-control in the quality and quantity source of input materials, being independent on external suppliers, thereby stabilizing costs, improving product quality and improving business efficiency. Other seafood enterprises can refer to the circular economy model applied by Vinh Hoan Joint Stock Company in accordance with the situation and goals.